BITCOIN TO ZEROCOIN

 

Bitcoin is the first e-cash system to see widespread adoption. While Bitcoin offers the potential for new types of financial interaction, it has significant limitations regarding privacy. Specifically, because the Bitcoin transaction log is completely public, users’ privacy is protected only through the use of pseudonyms. In this paper Nivetha has proposed Zerocoin, a crypto-graphic extension to Bitcoin that augments the protocol to allow for fully anonymous currency transactions. The system uses standard cryptographic assumptions and does not introduce new trusted parties or otherwise change the security model of Bitcoin. This paper detailed into Zerocoin’s cryptographic construction, its integration into Bitcoin, and examine its performance both in terms of computation and impact on the Bitcoin protocol.

 

In this paper, she has described Zerocoin, a distributed e-cash system that uses cryptographic techniques to break the link between individual Bitcoin transactions without adding trusted parties. To do this, she first defined the abstract functionality and security requirements of a new primitive that she calls as a decentralized e-cash scheme. She has next proposed a concrete instantiation and prove it secure under standard cryptographic assumptions. Finally, she describes the specific extensions required to integrate thier protocol into the Bitcoin system and evaluate the performance of a prototype implementation derived from the original open-source bitcoind client.

 

Finally, she believes that further research could lead to different tradeoffs between security, accountability, and anonymity. A common objection to Bitcoin is that it can facilitate money laundering by circumventing legally binding financial reporting requirements. She propose that additional protocol modifications (e.g., the use of anonymous creden-tials ) might allow users to maintain their anonymity while demonstrating compliance with reporting requirements.

 

This paper was presented by Nivetha, to know more click here.